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| Pfizer confirms bid interest in AstraZeneca | Pfizer confirms bid interest in AstraZeneca |
| (35 minutes later) | |
| US drugs giant Pfizer has confirmed it has contacted AstraZeneca over a possible multi-billion pound takeover. | US drugs giant Pfizer has confirmed it has contacted AstraZeneca over a possible multi-billion pound takeover. |
| Pfizer said it made an initial approach in January in an offer worth £58.8bn, but on Saturday had approached AstraZeneca for a second time. | Pfizer said it made an initial approach in January in an offer worth £58.8bn, but on Saturday had approached AstraZeneca for a second time. |
| AstraZeneca said the original offer "significantly undervalued" the firm, which employs more than 51,000 staff. | AstraZeneca said the original offer "significantly undervalued" the firm, which employs more than 51,000 staff. |
| If Pfizer comes up with a successful bid it would be the biggest takeover of a UK firm by a foreign company. | If Pfizer comes up with a successful bid it would be the biggest takeover of a UK firm by a foreign company. |
| However, AstraZeneca said it was "confident" its strategy would create "significant value" for shareholders on its own. | However, AstraZeneca said it was "confident" its strategy would create "significant value" for shareholders on its own. |
| "The Board remains confident in the ongoing execution of AstraZeneca's strategy as an independent company," it added. | "The Board remains confident in the ongoing execution of AstraZeneca's strategy as an independent company," it added. |
| Pfizer said in a statement that AstraZeneca's refusal to engage meant it was currently "considering its options". | Pfizer said in a statement that AstraZeneca's refusal to engage meant it was currently "considering its options". |
| Global player | Global player |
| AstraZeneca manufactures drugs in 16 countries focusing on treatments for diabetes, cancer and asthma as well as antibiotics. | AstraZeneca manufactures drugs in 16 countries focusing on treatments for diabetes, cancer and asthma as well as antibiotics. |
| It reported £25.7bn in sales last year, with £3.3bn in pre-tax profit. | It reported £25.7bn in sales last year, with £3.3bn in pre-tax profit. |
| In the UK it has eight sites and about 6,700 employees. | |
| Recently it has laid off thousands of staff in an effort to reduce its costs to compensate for a fall in sales due to patent losses on blockbuster medicines. | Recently it has laid off thousands of staff in an effort to reduce its costs to compensate for a fall in sales due to patent losses on blockbuster medicines. |
| In April, it posted a drop in first quarter profits after its earnings were by hit by patents expiring on some of its older medicines. | In April, it posted a drop in first quarter profits after its earnings were by hit by patents expiring on some of its older medicines. |
| 'Compelling opportunity' | 'Compelling opportunity' |
| Pfizer said its initial offer in January was a combination of cash and shares worth £46.61 per AstraZeneca share, worth £58.8bn in total. | Pfizer said its initial offer in January was a combination of cash and shares worth £46.61 per AstraZeneca share, worth £58.8bn in total. |
| At the time, it represented a 30% premium to AstraZeneca's share price, although AstraZeneca's share price has since increased and on Monday morning it jumped nearly 15% to £46.88p. | At the time, it represented a 30% premium to AstraZeneca's share price, although AstraZeneca's share price has since increased and on Monday morning it jumped nearly 15% to £46.88p. |
| Pfizer said the deal was "a highly compelling opportunity" for AstraZeneca's shareholders. | Pfizer said the deal was "a highly compelling opportunity" for AstraZeneca's shareholders. |
| It said if the takeover went through, the combined firm would have management in both the US and the UK, but would list its shares on the New York Stock Exchange. | It said if the takeover went through, the combined firm would have management in both the US and the UK, but would list its shares on the New York Stock Exchange. |
| "We have great respect for AstraZeneca and its proud heritage," said Pfizer chairman and chief executive Ian Read. | "We have great respect for AstraZeneca and its proud heritage," said Pfizer chairman and chief executive Ian Read. |
| Pfizer said it would only make a firm offer if AstraZeneca directors voted unanimously in favour of the deal. | Pfizer said it would only make a firm offer if AstraZeneca directors voted unanimously in favour of the deal. |
| "The strategic, business and financial rationale for a transaction is compelling," it added. | "The strategic, business and financial rationale for a transaction is compelling," it added. |
| Hostile move? | Hostile move? |
| Buying AstraZeneca would give Pfizer, whose drugs include Viagra, access to a number of cancer and diabetes drugs. | Buying AstraZeneca would give Pfizer, whose drugs include Viagra, access to a number of cancer and diabetes drugs. |
| However, Justin Urquhart Stewart, head of corporate development at Seven Investment Management, told the BBC the price Pfizer is offering was still too low to secure a deal. | However, Justin Urquhart Stewart, head of corporate development at Seven Investment Management, told the BBC the price Pfizer is offering was still too low to secure a deal. |
| "It's too close to what it is priced at in the market," he said. | "It's too close to what it is priced at in the market," he said. |
| "They've tried to talk to the management and gain agreement but that's not happened so they are considering now going directly to the shareholders". | "They've tried to talk to the management and gain agreement but that's not happened so they are considering now going directly to the shareholders". |
| Citi analyst Andrew Baum said he believed there was now a 90% chance that Pfizer would acquire AstraZeneca for at least around £49 a share. | Citi analyst Andrew Baum said he believed there was now a 90% chance that Pfizer would acquire AstraZeneca for at least around £49 a share. |
| Linda Yueh, the BBC's chief business correspondent, notes that AstraZeneca is a key UK firm in the area of research and development (R&D) and also in exports. | Linda Yueh, the BBC's chief business correspondent, notes that AstraZeneca is a key UK firm in the area of research and development (R&D) and also in exports. |
| "AstraZeneca's £7bn of drugs sold every year accounts for a whopping 2.3% of British goods exports," she added. | "AstraZeneca's £7bn of drugs sold every year accounts for a whopping 2.3% of British goods exports," she added. |
| Pfizer has made other major acquisitions, its most recent being the $68bn (£40.4bn) purchase of Wyeth in 2009. | Pfizer has made other major acquisitions, its most recent being the $68bn (£40.4bn) purchase of Wyeth in 2009. |
| However, this would mark its biggest foreign acquisition. | However, this would mark its biggest foreign acquisition. |
| It would also be the largest foreign takeover of a British firm, beating some of the more recent deals which include: | It would also be the largest foreign takeover of a British firm, beating some of the more recent deals which include: |
| However, the BBC's business editor, Kamal Ahmed, warned Pfizer's takeover approach could turn into a lengthy battle. | However, the BBC's business editor, Kamal Ahmed, warned Pfizer's takeover approach could turn into a lengthy battle. |
| "If AstraZeneca does not engage, and it hasn't so far, this bid could turn hostile," he said. | "If AstraZeneca does not engage, and it hasn't so far, this bid could turn hostile," he said. |